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DoT yet to submit evidence to back up its Rs 21,135-crore AGR claims to Reliance Communications RP

The Indian Express has learnt. The delay by the DoT comes even as the Committee of Creditors (CoC), led by State Bank of India (SBI), approved a Rs 23,000-crore plan for the resolution of RCom last week.

Written by Aashish Aryan , Karunjit Singh | New Delhi | March 11, 2020 3:00:42 am
Reliance Communications, Reliance Communications debt, Reliance Communications anuil ambani, RCom debt, Reliance Communications AGR dues After the Supreme Court’s judgment upholding the DoT’s definition of AGR, the RP of RCom had, through a letter written on November 18, 2019, asked the DoT to “make necessary changes as appropriate to their claim”, and re-submit the form. (File Photo)

Despite repeated reminders from the resolution professional (RP) of debt-laden Reliance Communications (RCom), the Department of Telecommunications (DoT) is yet to submit any documentary evidence to support its adjusted gross revenue (AGR) claim of Rs 21,135 crore, The Indian Express has learnt. The delay by the DoT comes even as the Committee of Creditors (CoC), led by State Bank of India (SBI), approved a Rs 23,000-crore plan for the resolution of RCom last week.

After the Supreme Court’s judgment upholding the DoT’s definition of AGR, the RP of RCom had, through a letter written on November 18, 2019, asked the DoT to “make necessary changes as appropriate to their claim”, and re-submit the form.

The forms and documents, however, had not been submitted until last week of February, the sources said. The RP of RCom and the DoT did not respond to emailed queries till the time of going to press.

According to the rules of the Insolvency and Bankruptcy Code (IBC), all creditors have to submit their claims of debt owed to them by the company under the Corporate Insolvency Resolution Process. As the DoT is the enforcing agency, which is liable to collect AGR dues, it will be classified an operational creditor in RCom’s insolvency process. Operational creditors are placed below financial creditors and workmen in the pecking order in accordance with the IBC rules.

For RCom, the claims of operational creditors, including the DoT, amount to Rs 33,000 crore. The total debt of the company is around Rs 46,000 crore. The SBI-led CoC has approved a Rs 23,000-crore joint bid UV Asset Reconstruction Company (ARC), and Reliance Jio Infocomm (Jio).

Explained

All creditors need to submit claims of debt under CIRP

According to the rules of the Insolvency and Bankruptcy Code (IBC), all creditors have to submit their claims of debt owed to them by the company under the Corporate Insolvency Resolution Process. As the DoT is the enforcing agency, which is liable to collect AGR dues, it will be classified an operational creditor in RCom’s insolvency process. Operational creditors are placed below financial creditors and workmen in the pecking order in accordance with the IBC rules.

Other than AGR dues, the DoT has not submitted any documentary evidence necessary for the verification of Rs 908 crore, which has been categorised as pending spectrum usage charge, one of the sources said.

Though an amount of Rs 15,889 crore, comprising the license and spectrum usage charge dues, which had been placed by the RP in the ‘contingent claims’ category, have since been admitted as “operational debt”, the DoT has not re-submitted the form with details of additional debt owed to it for this.

Once the DoT completes its ongoing reconciliation exercise on the AGR dues owed by various companies, the amount may be verified again and revised once formal claims from the telecom ministry is received, according to the sources.

RCom, which was admitted into insolvency by the Mumbai Bench of the National Company Law Tribunal (NCLT) in June 2019, is covered by moratorium under the IBC and, therefore, did not have had to pay AGR dues by January 23, as mandated by the SC for other telcos.

As of March 4, RCom owed the government 21,135.64 crore AGR dues, of which Rs 16,457 crore was license fee, while around Rs 4,683 crore was spectrum usage charge dues, according to the DoT’s calculations. The company has so far deposited only Rs 3.96 crore in total with the DoT, the Minister of State for Telecommunications had informed the Lok Sabha.

From other companies, such as Vodafone Idea, the government has claimed pending AGR dues of Rs 49,538 crore, while from the Bharti Airtel group, it expects payment of Rs 27,240 crore. The Sunil Bharti Mittal-led Bharti Airtel group has paid Rs 13,000 crore, while it has deposited another Rs 5,000 crore with the DoT as a precautionary measure and had claimed compliance with the Supreme Court judgment on AGR.

The apex court, on October 24, 2019, upheld the DoT’s definition of AGR and said all the license and spectrum holders must pay these dues by January 23.

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